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CFM Clarifies IATA Agreement Aftermarket Policies

HAMBURG--To provide more clarity on the changes the recent International Air Transport Association (IATA)/CFM agreement will bring, Bill Dwyer, GE Aviation Services marketing leader, spoke with Aviation Week on the sidelines of its Aero-Engines Europe event.

While CFM was disappointed that IATA chose to file a formal complaint with the European Commission “given that we have what we view as the most open and competitive aftermarket model, we took the engagement very seriously as an opportunity to listen to customers, understand their concerns and address those concerns," says Dwyer.

The resulting Conduct Policies reflect trying to drive more transparency into CFM’s aftermarket practices. As part of its agreement with IATA and to demonstrate transparency, CFM posted the 45 pages of legal documents on its website for all to see. Yet some news reports have mis-characterized elements of it—including saying the OEM will use PMA parts—so Dwyer spelled out some specifics to set the record straight.

For starters, CFM changed its policy on license fees, based on complaints from airlines that don’t have their own MRO shops and had to pay royalty fees to external MROs. CFM addressed this by waiving the license fee certified MROs have to pay.

CFM also emphasized that it would not require customers to sign exclusive contracts. While Dwyer said the company did not have such a policy and has always tried to customize contracts, CFM put it in writing that it would not force exclusive contracts.

On the repair front, CFM was accused of removing repairs from maintenance manuals. “We don’t do that, but we agreed [in writing] not to do that,” says Dwyer.

When it comes to parts, “CFM’s position has always been and will always be to propose use of OEM parts," says Dwyer. "It’s our brand."

CFM does not prohibit others from using PMA parts, non-OEM parts or non-OEM repairs in its engines, and “when we sell a part to an MRO or airline, we don’t have any strings attached to the configuration of the engine that they put it in," Dwyer explains. "If they choose to put an OEM part next to a non-OEM part, that is their choice,” he adds. However, he emphasizes, if they install a non-OEM part or use a non-OEM repair, caveat emptor comes into play.

CFM’s warranty policy is based on cause-and-effect. “If the non-OEM part caused the failure or played a part in the failure, we won’t cover the warranty,” says Dwyer.

Related to that, if a customer sends an engine with a non-OEM part to CFM for maintenance, CFM will propose the use of a new or used OEM part as a replacement—so it knows the full airworthiness. Dwyer says customers understand this policy but IATA was concerned about customers who might not know a non-OEM part was installed in their engine.

In that limited “surprise” case, CFM will continue to offer a commercial solution to replace the non-OEM part. Going forward, if the non-OEM part in its “as-removed condition” is serviceable, and doesn’t require repair, “we will give the customer the option to reinstall it,” says Dwyer. But CFM will first send that part back to the airline and require it to get an 8130-3 airworthiness approval tag to prove the part’s airworthiness. In that case, the airline also will need to release CFM from indemnification and turnaround times due to the delay. Dwyer says this instance of CFM using a non-OEM part is a very limited, narrow exception.

Dwyer also pointed out that CFM is committed to following its Conduct Policies and has agreed to hire a trustee to which it will be accountable. If the OEM fails to follow any of the policies, it will be fined by the trustee. “We’re putting our money where our mouth is,” he sums.